Monthly Archives: September 2009

Real Estate Market Still Needs A Boost!

This just came in from the National Association of Realtors.

 

REALTORS® all over the country have expressed a sense of "bigness fatigue."  They’re tired of big bailouts, big government, big reforms, and big deficits.

But one BIG problem still lurks in many of our communities. The housing recovery is not yet complete. Housing has been the traditional engine that pulled the nation out of a bad economy.  And that job isn't finished.  Restoring the health of the housing market will require one more big effort.  And your help is essential.

  • After four months of improvement, housing sales declined in August.  The decline was modest; in fact August 2009 was still stronger than August of 2008. This modest decline underscores the reality that the market is still fragile. 
  • NAR data shows that inventories began to decline once the credit was enacted. The credit has been responsible for over 355,000 new sales.  
  • The tax credit has effectively reduced inventories, stabilized prices, shored up neighborhoods hit hard by foreclosures, and begun rebuilding local tax bases. 

These are all good things.  The fact that the market is better than in 2008 illustrates that these incentives matter.  But the credit has not yet finished its job. The $8000 first-time homebuyer tax credit will terminate soon.  As the law stands today, eligible buyers will actually need to get under contract almost immediately in order to be able to close their transactions in time. The law requires that closing must occur by November 30th for buyers to actually take the credit. 

The housing market is stabilizing and improving, but the housing market crisis won't end this year. We can't wait until late in the year to see what happens.  Please act NOW and tell Congress to extend the credit through 2010.

Are you sure your EIN is safe from identity theft or fraud?

The National Association of Tax Reporting and Payroll Management (NATRPM) is warning payroll managers about potentially fraudulent requests for their employer's federal Employer Identification Number (EIN).

It has been brought to NATRPM's attention that some fairly large Form 1040 tax return preparer organizations are instructing their preparers to do whatever is necessary to file a return on the first day a new client walks in the door because the new client may not come back if more information is needed. If the client has forgotten or lost his or her Form W-2, or hasn't received it yet, some preparers will work from pay stubs to file tax returns early–and will call employers to get EINs to complete the process.

Recently I found myself facing a problem. I received a notice from the Social Security Administration stating that I had an employee back in 2002 that had reported earnings of only $2350 and requested that it be changed to $23,500 because it was recorded wrong.  After digging a little, I found that the SSN that was requesting this dollar increase didn't even work for me. Either it is some kind of mistake or someone has found yet another way to defraud the government and yes all of us taxpayers out of some more money. 

So beware of your EIN just as much as your SSN.

Arguing over money in your marriage? Here is some great advice!

Arguing over money? 6 tips to get along

Parenting magazine on finding a financial balance you can both live with

By Michele Bender

Parenting magazine

TODAY

updated 10:36 a.m. ET, Wed., Oct . 22, 2008

My husband and I would have the perfect marriage if there were no such thing as money. On most issues, David and I are on the same page, but when it comes to cash we're reading completely different books. I'm a saver who balances my checkbook to the penny; he's a spender who knows only “about” how much cash is in the bank.

Our money issues got worse after we became parents. The night after our now 6-year-old daughter, Lily, was born, it wasn't just the pain of delivering a nine-pound baby that kept me up — I tossed and turned worrying about the cost of childcare and college. Later on, I'd get mad when David impulsively bought Lily books or DVDs. In turn, he resented that I wouldn't let him spoil her. I'd even get annoyed when he did something nice for me, like hire a sitter so we could go out. Didn't he realize the price tag of such a treat?! It wasn't long before money squabbles became a regular part of our daily routine.

I know now that our struggle to find common financial ground was far from unique — arguing over money is the number one cause of divorce. But I also know that being stuck in a money-fighting rut doesn't doom you forever. In fact, the path to peace is probably a lot easier than you think. Ready to get started?

1. Remember that your relationship is about more than the bottom line
I used to think that nobody else had money issues like David and me. Every time we fought, it felt as if there was something seriously wrong with our marriage. And, of course, that worry only made our money “talks” even more tense. The truth is, no two people are ever in complete agreement over money.

“Even if you and your partner are both savers or both spenders, you will still polarize about money, and that's okay,” says Olivia Mellan, a mom of three in Washington, DC, and author of Money Harmony. One person will eventually become more of a spender or a saver to balance out the other, and disagreements are bound to happen — but not because there's some hidden flaw in your marriage. Simply knowing that can help you face your differences and discuss them calmly. For me, once I took my Oh-my-God-are-we-just-a-bad-match? fear out of the equation, I was more confident about bringing up the subject of money and less angry when David and I discussed it. Who knew? He responded in kind.

2. Share your history
A big part of how you deal with money today is based on how your parents handled it. “When you know the reasons driving your spouse's behavior, it makes more sense and you're less likely to feel angry when you disagree,” says certified financial planner Sarah Young Fisher, president of Kuntz Lesher Capital LLC in Lancaster, Pennsylvania, and a mom of two.

Taking her husband's childhood into account worked for Vicki Brown, a mom of two in Atlanta. “When I realized that my husband, who's a spender, grew up without any extras or luxuries, I became less resentful and more compassionate,” says Brown, who's in charge of the family's finances. “Now when I get upset, I try to remember that fact, especially when he's splurging on something for our children that he didn't have growing up, like a wonderful vacation. It's not that we don't ever disagree now, but at least I get where he's coming from.”

3. Give a little credit
Even if your partner's financial habits are totally foreign to you, there's usually something you can admire about them. The hard part is that every now and then, you have to tell him! “This creates good will in a marriage and makes the other person feel safe enough to take an honest look at his own issues,” says Mellan.

I can attest to the power of a compliment, which I tried on the night David and I pay bills — a chore that usually ends with us going to bed without speaking. When I spied the cost of a pricey fishing pole on our Visa bill, I took a deep breath, then told him that I admired how he can buy something without overanalyzing it. I'd never said that to him before, out of fear he'd just spend more. David immediately relaxed, and told me that my diligence in managing our bank accounts and the kids' college funds was one reason he thought I was a wonderful mother. (Yay! I was more than an annoying, tightfisted wife!) That night, not only did we go to bed on speaking terms, we actually felt closer.

4. Forget budgets; create a spending plan instead
Before you can really get a sense of where your family stands financially, you need the hard numbers — what's coming in and what's going out. Normally, such a thing is called a budget, but there's something about that word that's kind of awful: It's unyielding, bossy. Always trying to force you to live by its rules. To a spender (in particular), budgets practically ask to be blown. A spending plan, on the other hand, feels more reasonable — something you can live with. This tiny shift in semantics helped Lisa Druxman of San Diego, a mom of two. “My husband's conservative and meticulous about money, and I'm carefree and believe you need to take risks — which makes it hard for us to talk about,” she says. “Creating a plan helped because now we both understand our income, expenses, and what's left over. And having one that we created together reminds us that we're on the same team working toward the same goal.”

Getting started is pretty simple: Write down your fixed monthly expenses, like the mortgage and car payments, and subtract that amount from your income. Then figure out how much you can spend or save by factoring in the things you can't do without (diapers and food) and ones you can (ordering in lunch at work). Financial software like Quicken and Microsoft Money Plus can help, as can free websites like Mint.comand MoneyCenter.Yodlee.com, by pulling info straight from your online accounts. Doesn't matter how you do it, as long as it works for you.

5. Schedule ‘the talk’
Having a regular time to meet, along with a set agenda, eases stress and helps make sure both people are prepared, says Mellan. Plus, both of you should have a general idea of your financesat any given time: What big-ticket expenses are on the horizon? How much debt do you have? What's in your savings account? If you sit down once or twice a month to talk, the bill payer doesn't resent having the stress of making ends meet and the non–bill payer doesn't question the other person's abilities — or check out completely.

6. Divide your stash
Why? Because having cash of your own is a very, very good thing. “When my husband and I had just a joint bank account, we used to fight because we had to discuss every single purchase, whether I wanted a new dress or he wanted stereo speakers,” says Fisher. “Then we decided that we'd each get a weekly allowance. This way, if I want something, no matter how trivial, I can buy it because it's my money. It was a huge change in our relationship because now we never fight about money like we used to.”

And before you discount this advice because you're a one-income family, hold up: Separate accounts can work well for you, too. Once you agree on allowance limits, the person at home with the kids doesn't have to feel guilty about spending money the other earns, and you both can stop keeping tabs.

To divide and conquer, try setting up three checking accounts: one joint account for expenses and two individual accounts for your personal stuff. In the joint account, deposit equal percentages of your incomes (not equal amounts of money) to cover household expenses, then put your allowance amounts in the others. With multiple pots, multiple needs get met with a whole lot less stress. And that's good news for your bottom line — and your marriage.

For more family relationship advice, visit www.parenting.com.

$8000 tax credit and military personel

Realty Times posted this information relating to a flaw in the tax credit that is due to expire on November 30, 2009.

The first major change to the $8,000 home buyers tax credit began moving through Congress last week, giving hope to real estate and building groups pushing for extension of the entire program before it expires Nov. 30.

House Ways and Means Committee chairman, Congressman Charles Rangel, a New York Democrat, combined several smaller bills into the “Service Members Home Ownership Act of 2009” late last week, with a floor vote expected this week.

The bill is intended to correct a flaw in the original tax credit legislation: By requiring buyers to occupy and own their first home for 36 months to fully qualify for the credit, the program creates serious problems when military, Foreign Service and intelligence agency personnel are transferred overseas.

During their absence, they are not occupants of their houses, and sometimes have to rent them out or sell. Any of these events make them ineligible to retain the $8,000 credit under current law. Ineligible buyers must then repay the credit to the IRS.

Oregon Congressman Earl Blumenauer, sponsor of one of the bills consolidated into Rangel's, said “it is absurd that thousands of Americans serving our country, away from friends and family … must choose between their service work and home ownership.”

The Ways and Means committee's bill would waive the repayment requirement when a service member must sell a home within the 36 month period because of a transfer to a new duty station or overseas, and would count service-related absences toward the 36 month requirement.

Another provision in the bill would extend the $8,000 credit for another year for personnel who may have missed out on claiming the credit because they thought they wouldn't qualify due to an overseas posting.

The credit for these individuals would be extended to November 30, 2010 from November 30, 2009, provided the served outside the U.S. for at least 90 days during calendar year 2009.

The bill, which has bipartisan support, could be sent to the Senate for action as early as next week, Congressional sources told Realty Times.

More important for the housing market overall, however, is the precedent set by the bill's extension of the credit for an extra year. It's not a far leap from that position to a general extension of the entire $8,000 credit program to the same date.

The National Association of Realtors, National Association of Home Builders and the Mortgage Bankers Association jointly sponsored an ad campaign last week aimed at convincing Congress to give the credit program another year.

Realty Times will keep you on top of this fast-moving issue as it develops.

If you have any thoughts regarding this issue you may contact your realtor or me.

New economist predection on housing market

Today it was quoted "For many reasons, the rebound will be disproportionately small compared to the decline," Moody's said this week in its latest outlook on the residential market. "It will take more than a decade to completely recover from the 40% peak-to-trough decline in national home prices" from Boston Market Watch.

This may seem scary but that just means we are finally stabilizing.  If you recall the last sellers market was in the 80s and ended in 88. The slow buyer's market lasted about a decade.  So as history seems to repeat itself we should start seeing a slow but steady incline in the housing market soon.

Sept 09 update on the Real Estate Market

Although it may be my personal view, the market seems to be somewhat stable compared to the last 2 years.  As of September 1st the buyers are still looking at homes and their are homes under contract but it is a little slower than last month.  Perhaps the football season is killing the open house traffic.  For first time homebuyers there is still time to get the $8000 tax credit but time is running out.  You must be settled on a home by November 30,2009.  Like the auto bailout, cash for clunkers, this may not be extended.  Personally, I believe that if the credit were available to all buyers who intend to live in a home as a primary residence, not just for first timers, that it would offer more to stimulate the slowing fall/winter market.  Of course, fear of losing a job has much to do with a buying decision.  But like FDR said himself, "the only thing we have to fear is fear itself".  Let's not let the fear of the unknown be our compass but rather history.  Things can only get better if you believe it will.  Have faith and God Bless!